Types of Nonprofits in Ireland

The various forms and types of nonprofits play a crucial role in fostering political and social progress. Also, the community and voluntary sectors are believed to be essential components of democratic systems.

Ireland during the 1970s experienced the rise of new social actors like most European nations. These individuals were upset about the unequal treatment of some groups of people within political and social structures. These led to the establishment of organizations during the late 1980s. Their aim was to address the inequality of specific groups of people.

Also, over the past decades, community, as well as voluntary sector development in Ireland, can be attributed to international events. This has led to the creation of partnership arrangements between NGOs and the state in the country.

In this article, we will outline the various types of nonprofits in Ireland and their contributions to the nation’s development.

• Ireland has over 33,000 nonprofits in the country
• The constitution does not oblige NPOs to be established solely for the public benefit.
• However, to be eligible for charitable status, an NPO is mandated to be created for the public benefit

What are the types of nonprofits in Ireland?

Ireland nonprofits can be grouped into three classes. The country’s legislative act also recognizes these NGO groups. They are; 

1. Unincorporated associations: these types of nonprofits are popular in Ireland as they are rather easy to establish. Unincorporated associations are membership-based groups founded by oral or written membership agreements. The rules that govern their operation are usually interpreted according to contract law. 

Generally, an unincorporated association does not possess a legal personality. Hence, these organizations cannot pursue legal relations in their own right. Members jointly take responsibility for the association’s debts. 

2. Trust: these types of nonprofits also have no legal personality like an unincorporated association. However, in this case, one or more persons functioning under the authority of a “deed of trust” manage accounts or property on behalf of another. The “trust deed” or “will” serves as the governing instrument. Also, the trustees appointed possess executive power under the terms of the trust. These trustees are required to enter into legal relations and take responsibility for personal liability.

3. Company limited by guarantee (CLG): organizations that choose to register as CLGs will require legal personality. These types of nonprofits possess no share capital. Also, they are not considered shareholders but guarantors. The guarantors are obliged to donate €1 towards the company’s dissolution in the case of a shortfall.  

CLGs are not allowed to distribute profit to their members. These nonprofits are also granted charitable tax exemptions upon application. CLG’s governing instruments comprise its memorandum and its articles of association. 

What regulatory framework governs the various types of nonprofits?

Ireland differentiates between mutual benefit and public benefit organizations. NGOs however include religious organizations, foundations, cooperatives, and trade unions, among others. 

Likewise, the constitution does not oblige NPOs in the country to be established solely for the public benefit. Several nonprofits in the country are created to benefit their members. This includes professional bodies, trade unions, sporting and recreation clubs, political parties, credit unions and cooperatives. However, to be eligible for charitable status, an NPO is mandated to be created for the public benefit. This is when these nonprofits can be granted tax exemptions. 

The tax exemptions provided by Irish charitable law embody income tax,  Deposit Interest Retention Tax (DIRT), corporation tax, capital acquisitions tax, capital gains tax, stamp duty, and dividend withholding tax. Nonprofits are however not exempted from VAT. 

How many nonprofits are in Ireland?

Firstlawcomic.com, a fact-based platform reported that Ireland has over 33,000 nonprofits in the country. A large number of the various types of nonprofits are funded by the state with over €5 billion yearly. This government contribution makes up 8.2% of all expenditures. Also, a large sum of these funds is geared towards the provision of public services, especially in the area of education and healthcare. 

Conclusion

The various types of nonprofits in Ireland have evolved over the past three decades. The sector is known for its societal impact, especially in the area of combating social exclusion by influencing policy development. 

However, like most countries of the world, nonprofit activities in Ireland are rarely scrutinized. The lack of critical examination of their sector makes their activities rather arbitrary. Hence, there is a need to establish accountability mechanisms for NGOs in the country. 

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